Challenges for retail and consumer product (R&C) companies are many in today's business environment as a confluence of market forces have created an extremely difficult climate. In mature markets, R&C Sector companies are constrained in their ability to grow and maintain profit margins as a result of a deflationary operating environment, market saturation, slowing population growth, and more discerning but less loyal consumers. There are also the immediate concerns of growing competitive pressures, an increase in the number of alternative sales channels, a blurring of roles between suppliers and retailers, and — particularly for consumer product manufacturers — a shift in the balance of power to the retailers.
Due to stakeholder demands and the resultant Sarbanes-Oxley legislation, the retail and consumer industry is also experiencing heightened regulatory pressures. These pressures will require greater accountability and accuracy in the reporting of financial results, increased levels of corporate governance and Board involvement, stronger internal control documentation and a greater need for stronger risk management practices across the enterprise.
